Most Medicare Part D drug plans have a phase in between the Initial Coverage Period and Catrastorphic Coverage period called the Coverage Gap Phase. This “Coverage Gap” is also sometimes called the Medicare Part D Donut Hole. Some Advantage plans provide additional “gap coverage” to help lower costs during the coverage gap phase.

The Donut Hole got its name because of the gap in drug coverage on most plans. Before 2011 you were 100% responsible for drug costs in the gap, but the Affordable Care Act closed the gap lowering costs until you were only responsible for 25% of costs moving forward.

The Part D Donut hole closed in 2020. That means for 2020 forward you only pay 25% of the cost of drugs during the Coverage Gap phase.

Learn more about the four phases of Medicare drug plans.